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Bidders for New Zealand's largest-listed retailer The Warehouse Group Ltd may need to offer up to $8 a share to succeed, brokers First NZ Capital said today.
That would be at a near 12 per cent premium to its last traded price at $7.17.
First NZ analyst Sandra Urlich said the price would depend on how intense the competition is between the two suitors, Australia's biggest retailer Woolworths Ltd and local grocery co-operative Foodstuffs.
She said any bidders would have to offer enough to tempt founder and major shareholder Stephen Tindall to sell.
"A bid of $7.50 would represent fair value for The Warehouse," Urlich said in a research note.
"Extending this to $8.00 to secure the deal is not out of the question," she said, adding that offers over that level were unlikely.
Mr Tindall and interests associated with him control around half of the company. A bid of $8 a share would value The Warehouse at $2.48 billion.
The stock is trading near the top of a $3.60 to $7.31 range over the past year.
The competition regulator is considering applications by both Woolworths and Foodstuffs for clearance to buy The Warehouse, and is due to make a decision by April 27.
Woolworths and Foodstuffs each have a 10 per cent stake in the Warehouse, though neither has committed to launching a full takeover offer should they obtain regulator clearance.
- REUTERS
